Movado Group Q1 net sales increased to $120.9 million
Gross profit was $65.2 million, or 53.9% of sales, compared to $59.9 million, or 54.5% of sales, in the first quarter last year. The planned decline in gross margin percentage was primarily the result of the unfavorable impact of changes in foreign currency exchange rates and channel and product mix partially offset by leverage gained on certain fixed costs.
Operating expenses were $54.2 million as compared to $49.9 million in the first quarter last year. This increase was primarily the result of an increase in compensation and benefits expense, higher marketing expenses and an increase due to the translational impact of foreign currency exchange rates.
Operating income increased 9.2% to $10.9 million compared to $10.0 million in the same period last year.
The Company recorded a tax provision of $3.4 million, which equates to an effective tax rate of 31.6%, as compared to a tax provision of $3.3 million and an effective tax rate of 28.8% in the first quarter last year.
Net income was $7.4 million, or $0.29 per diluted share, compared to net income of $8.2 million, or $0.32 per diluted share, including a $0.04 per share gain related to the sale of a Company-owned building in Switzerland, in the first quarter of fiscal 2014. ■